Poland: Market Remains Challenging with Hope in Free TV and VOD

Poland is the sixth largest economy in the EU. Unfortunately, it remains a challenging market for independent films. Cinema attendance has been steadily rising for the last couple years with admissions up 16% 2016-2015. However, the opportunities for imported independent titles are limited.

The 2016 box office was dominated by U.S. major studio films while local titles had a 25% market share. Animation and action were the top theatrical genres followed by comedy and drama. Five of the top ten titles were Polish, including the first and second best performing films. The theatrical distribution sector is crowded with 37 companies releasing films in 2016. Thus, that leaves little room for imported independents that can’t guarantee strong box office results. The top imported independent film, Now You See Me: The Second Act, finished in 19th place.

The DVD market continues to generate revenue but numbers have dropped dramatically in recent years.  DVD releases are still possible for a stronger independent title. However, lower budget “B & C” level films are no longer released on DVD.

The Polish television sector is characterized by a high level of consumption per capita. Daily TV viewing time was estimated at 258 minutes in 2017. The Free TV sector is dominated by four channels: TVP1, TVP2, TVN and POLSAT, which collectively had a 41.3% audience share in 2016 (a drop from 58% in 2011). The channels are owned by local broadcasters TVP (Telewizja Poland), Polsat (Telewizja Polsat), and TVN. There was significant fragmentation of the Free TV sector in recent years as the importance of smaller broadcasters grew, mainly at the expense of the four largest channels.

Free TV broadcasters will acquire independent films but most of their feature film slots are filled via output deals with U.S. major studios. The major studios have become more flexible in allowing the TV channels to decide which titles they want to take. Thus, it has become more difficult for independent films to sell to Free TV because the chosen studio titles are often a better fit for the local audience and the channels’ brand. In addition, an increasing number of slots are being filled by local productions, a number of which are financed by the broadcasters themselves. However, as the smaller broadcasters grow in market share and continue to open new channels, the demand for international independent programming will increase.

The top Free TV broadcasters, TVP, TVN, and Polsat, all have Pay TV channels. These networks account for a majority of the Pay TV audience share and acquire programming via output deals. The remaining Pay TV market is dominated by major international players such as Discovery Communications, Viacom, Canal+, and Time Warner. Most of the international Pay TV networks also have output deals with U.S. major studios. Currently Canal+ and HBO are the biggest buyers of independent programming in the territory.

SVOD is now growing at a faster rate than Pay TV. However, Poland’s SVOD sector is growing at a slower rate than in other markets in Western Europe. Interest in cord-cutting is waning as Pay TV subscribers are supplementing their TV packages with SVOD subscriptions rather than replacing Pay TV with SVOD. Still SVOD penetration remains low (16% of households) compared to other Western European markets (Denmark 59% and Sweden 53%).

International services such as Netflix and Showmax dominate the VOD market. Smaller local services with a large amount of Polish language programming are starting to make headway. Popular local VOD portals include services by public broadcasters and leading mobile service providers. Piracy is the chief factor holding back the VOD market from development. Theatrical releases are often date-and-date in Poland with the U.S. release because films are so quickly pirated after their domestic release. Therefore, pricing remains very low for digital media deals in the territory.

Although still a challenging market, Poland offers some hope for independent films as new Free TV channels emerge and grow in market share. Pay TV deals with the major players (Canal+ and HBO) can be a fairly lucrative alternative when a title does not have theatrical potential. As the SVOD sector continues to develop and new platforms open, the demand for international independent programming will grow.